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SOUTH AFRICA’S COVID-19 RESPONSE

POLICY BRIEF SERIES

23 July 2020

COVID-19 RESPONSE POLICY BRIEF #2

TOWARDS A SAFER, MORE


EQUITABLE OPENING
OF THE ECONOMY
Michael Nassen Smith, Neil Coleman and Gilad Isaacs

SUMMARY
The approach adopted workers; income support for quarantined workers;
and unemployment insurance and business support
• South Africa needs a safer and more equitable for the informal sector. Short-time work should be
reopening of the economy complemented by an adopted to prevent retrenchments together with a
upscaling of state support mechanisms to workers, the strategy to move towards a shorter working week.
unemployed, and vulnerable businesses. Changes to the wage structure to reduce executive
• Securing health and expanding economic activity must and management pay and make it more equitable
be viewed as a single objective aimed at the realisation will assist in funding some of these measures. The
of rights in order to maximise the well-being of all. CCMA requires additional funding rather than the
proposed cuts. Finally, workers requiring COVID-19
• Social comorbidities rooted in South Africa’s vast levels
testing in private health facilities should have these
of inequality, must be accounted for in the return to
costs covered by their employers.
work and reopening of the economy.
3. Mitigate health vulnerability through protecting
• COVID 19 is a social problem demanding ambitious social the safety of vulnerable and quarantined workers,
interventions. It is not a personal responsibility issue. preferably though fully paid leave and cash
• The immediate burdens of reopening the economy, allowance; elderly and vulnerable persons within
without mitigation measures, will be disproportionally communities receive targeted and sufficient income,
felt by workers. food, and healthcare services; deployment of
community healthcare workers is increased; and that
there is no shortfall in treatment for individuals with
other chronic diseases, such as, HIV, TB and mental
Proposals
health needs.
1. Democratise the return to work through worker 4. Mitigate social vulnerability to facilitate a reopening
oversight of health and safety measures and of the economy through:
appointment of compliance officers; regular a. Income support: increase and expand access to
inspection of businesses and issuing of compliance COVID-19 grant or replace it with a 3-month
certification; strengthening the right to refuse to universal grant, and when it expires replace it
work in unsafe conditions; and stringent sanctions with a universal Basic Income Guarantee; increase
on employers for failure to comply. the Child Support Grant and allocate per child;
2. Democratise the costs and burdens of reopening and expand and extend the TERS scheme.
the economy by providing: a wage premium b. Human settlements: ensure: unrestricted water
for high-risk occupations; wages for furloughed access; the mass provision of ablution facilities

INSTITUTE FOR ECONOMIC JUSTICE


COVID-19 RESPONSE POLICY BRIEF #2: Towards a safer, more equitable opening of the economy – 23 July 2020
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in townships; and free mass provision of masks, e. Transport: Ensure trains can resume effective
sanitiser, and gloves. Expand and extend food operations through increased funding for
programme beyond the COVID-19 peak. Increase railway infrastructure and security services
the number of quarantine centers. Engage in to prevent theft and vandalism to. Increase
community driven health, education, and food government allocation to taxi industry, with
distribution initiatives. strict conditionalities to transform industry in
c. Public health: Increase budget allocation, interests of drivers and commuters, in order to
including for PPE, staff, testing (including reimplement evidence-based occupancy limits.
antibody testing), and other resource shortages f. Women: Relieve the burden of care through
in public sector, while supporting the local increased pay for frontline workers, income
manufacturing of testing kits. The arrangements support, and the CSG, and expand safe community
for resource sharing with the private sector at childcare and early childhood development
a reasonable cost must be clarified, including
centres. Support programmes and facilities
putting private facilities into public management.
confronting gender-based violence should be
Health and safety protocols should be consistently
prioritised and streamlined.
reviewed and regularly updated.
d. Education: Increase budget line-item devoted 7. Ensure a transformative role of the state by
to school infrastructure and improve access following through on commitments to a genuine
to PPE and water and sanitation facilities; re- and proportionate rescue package while reversing
implement the school feeding scheme; provide austerity measures; investigating corruption and
safe and reliable scholar transport; ensure free prosecuting guilty parties; implement regulations
menstruation products for girls returning to and conditionalities for government support in the
schools. Teachers and learners should be given the public interest; and improving state communication
right to refuse to attend schools if they feel their to build public trust and inspire necessary
safety is at risk. behavioural change and diligence.

1. INTRODUCTION
On Monday 1 June 2020, South Africa officially moved to Lockdown Level 3. Later in June
2020, we moved to ‘advanced’ Level 3, opening up even more sectors of the economy,
including restaurants, casinos, hair salons and cinemas. This means that 95% of the workforce
are currently expected to be back at work. This received a largely supportive response from
business groups, with labour unions and opposition parties raising concerns about the
threats posed and the scanty benefits that most working people will receive by doing so.
Contrary to World Health Organization (WHO) sale of alcohol has again been banned, and a curfew
guidelines, South Africa’s opening of the economy is reintroduced).
occurring before the epidemic has peaked. It has also
The state’s argument is that a rapid relaxation of
become clear that the government failed to sufficiently
restrictions is needed to weather the economic storm.
utilise the hard lockdown for its stated purpose, with
South Africa is now in a deep recession, its longest since
President Ramaphosa admitting that the country has
the global financial crisis, and the National Treasury
not established the testing and tracing capacity needed.
South Africans is now experiencing a rapid increase in the predicts the country faces a 7.2% contraction in 2020.
number of infections. Between 26 May and 26 June 2020 If the wheels of the economy are not set in motion, it
national infections increased fivefold. As of 19 July 2020, is argued, catastrophic levels of job losses and business
the disease has claimed 5 033 South African lives, with closures will follow.
over 360 000 infections. In the week of 22 June Gauteng’s The state’s position on the opening up of the economy
infections doubled and the province has now become the is supported by a number of experts who maintain that
new national hotspot. the government’s overall framing of a ‘risk-adjusted’
Because there is a lag between infection and reporting, strategy – which involves easing economic restrictions
we are only now witnessing the impact of the more while targeting various risk factors to spread, that can be
relaxed restrictions. We should expect even more ameliorated by individual and institutional behavioural
dramatic numbers into late July and August. Despite change – is appropriate given the dire need to reboot
this, on 12 July the President announced that the the economy and the state’s failure to ramp up its testing
relaxed Level 3 restrictions were being maintained, with and tracing capacities during the hard lockdown (see for
further relaxation on taxi occupancy rates (although example Van der Heever et al., 2020).

We propose an alternative approach and policy recommendations to


advance a better managed strategy for economic opening.

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COVID-19 RESPONSE POLICY BRIEF #2: Towards a safer, more equitable opening of the economy – 23 July 2020
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2. REFRAMING OF THE DEBATE: A WELL-BEING
AND SOCIAL COMORBIDITY FRAMEWORK
There can be no doubt that an indefinite closure of the economy is unsustainable. Yet the
reasoning that informs the current relatively rapid opening up of the economy is based on a
framework that: 1. Fails to appreciate the relationship between human well-being and the
economy; and 2. Discounts the unequal burdens that this opening up imposes on our population1.

Integrating human well-being Economic evidence supports this. Recent research


confirms a strong positive correlation between
The fundamental problem with the government’s
employee well-being and productivity, as well as
approach is rooted in its conception of health and
firm performance (Krekel, Ward and De Neve, 2019).
economic needs as constituting dual – and often
If workers feel safe, motivated, and materially and
competing – imperatives. The issue then becomes how
emotionally secure, their performance improves. This
to balance these complementary, yet relatively distinct,
fuels growth, productivity, and earnings within an
goals. While the hard lockdown can be argued to have
economy (Nozel and Martin, 2019).2 Increased human
been implemented in a manner that prioritised health
well-being (seen through, for example, health and
needs, the state is now placing overwhelming emphasis on
education, outcomes) all correlate positively with
rebooting economic activity irrespective of the health risks
greater economic activity and healthier and happier
within and outside of the workplace. This approach risks
societies.
making the lives of workers instrumental to the return to
business and profitability, despite rhetorical statements There are indications that such an approach works in
otherwise. It is also inattentive to international experience: fighting COVID-19 and the consequent social crisis. New
countries that engaged on a similar programme of rapid Zealand, who recently celebrated the ‘elimination’ of
relaxation of lockdown restrictions have not experienced COVID-19 in early June, adopted a ‘well-being’ budget
positive health or economic outcomes. and approach to policy design in 2019 (New Zealand
A better approach would be to view socio-economic Treasury, 2019; Magnus-Johnston, 2020). New Zealand
performance and outcomes as including workers’ did not rush to rapidly open the economy and when
health and safety. In doing so, we do not run the risk of it did, the state ensured that significant emphasis was
inappropriately balancing between health and economic put on worker safety. By contrast, countries and regions
imperatives. Economic performance and human well-being which decided to prioritise opening up economic
are fundamentally intertwined. activity in the short term, like Sweden and certain
states in the United States, have not only struggled to
combat the outbreak of the disease but have also not
The OECD’s The Economy of Well-being report defines experienced a positive improvement in the narrow
a ‘well-being economy’ as one in which a capacity economic outcomes desired. Sweden is currently
exists to create a “virtuous circle in which citizens facing a 7% GDP slump in 2020, its worst economic
well-being drives economic prosperity, stability and crisis since World War II (Lindeberg, 2020). This figure
resilience, and vice-versa those good macroeconomic is not dissimilar from EU countries which had hard
outcomes allow to sustain well-being investments over lockdowns.3
time” (Nozel and Martin, 2019). While the COVID-19
outbreak presents policymakers with unique and
difficult challenges, the South African return to work
should be guided by this holistic and moral framing Social comorbidities and inequality
of the economy as a domain in which human rights
should be protected and advanced. This approach We can better understand the totality of the COVID-19
acknowledges that a healthy and thriving economy challenge as involving a series of ‘social comorbidities’
demands a healthy and thriving population, where no rooted in our country’s wide levels of income, spatial,
one should be required to make trade-offs between gender, racial and wealth inequality. These inequalities
safety, health, and employment. have been significantly exacerbated due to the
COVID-19 shock.4

1. For further discussion see Neva Makgetla Op-Ed contribution on how deep inequities in our society influences expert advice:
https://www.businesslive.co.za/bd/opinion/columnists/2020-07-20-neva-makgetla-out-of-control-covid-19-harms-economy-more-
than-restrictions/
2. See also Financial Times article calling for higher wages in the context of the COVID crisis: https://on.ft.com/2DxH3SJ
3. Research on the 1918 flu pandemic in the United States further indicates that cities which held onto restrictions for longer in fact
experienced a quicker return to economic health than those that decided to open up quickly (see Friedman, 2020 for a discussion).
4. See Overview and Findings of NIDS-Cram Synthesis Report Wave 1 here: https://cramsurvey.org/wp-content/uploads/2020/07/Spaull-
et-al.-NIDS-CRAM-Wave-1-Synthesis-Report-Overview-and-Findings-1.pdf . The study finds up to three million job losses induced by
the COVID, disproportionately borne by lower-income and lesser-skilled workers and women.

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COVID-19 RESPONSE POLICY BRIEF #2: Towards a safer, more equitable opening of the economy – 23 July 2020
P R O T E C T L I V E S . S E C U R E L I V E L I H O O D S . R E S C U E A N D T R A N S F O R M T H E E C O N O M Y. 3
People are ultimately not only vulnerable due to health educational infrastructure and introduce extensive safety
burdens like diabetes and high-blood pressure, but measures - is instructive in terms of what can be achieved
because they live in dense neighborhoods, go without by a combination of political will and social pressure.
running water, use overcrowded transport, or work for
businesses that do not adhere to necessary health and
safety regulations. This toxic mix is visible, for instance,
in the COVID-19 outbreaks in dense informal settlements A safer and more equitable
and workplaces with lower-income workers in mining, reopening of the economy
manufacturing, retail, and services, sometimes due to
poor implementation of health and safety protocols. By It is concerning that the state appears to be seeing a
contrast, higher-income earners and managers can avoid return to economic activity as a substitute for its obligation
risk by working from home. The various intersecting ‘social to provide appropriate economic and social support.
comorbidities’ include: Government has begun to frame fighting the COVID-19
outbreak as a personal responsibility issue.6 This also works
• Limited access to healthcare services and reliance on
to obscure the responsibility of business to prioritise the
an overstretched and under-resourced public health
public interest over narrow concerns for profitability.7
service.5
Rather, a reopening of the economy
• Exposure - as a teacher, learner, or family member - to
schools that lack basic infrastructure needed to safely must centre the well-being and human rights of workers
mitigate against the disease. and the public and should be combined with a renewed
focus on extending support mechanisms to businesses,
• Living in dense, overpopulated communities with limited workers, and the most vulnerable. We should aim to agree
access to basic sanitation and low likelihood of being on a platform for a safer, and more equitable reopening of
able to physically distance. the economy that would benefit workers and communities
• Reliance on overcrowded and unsafe public transport to in the short term and not force impossible trade-offs
access work or other necessities such as food. between lives and livelihoods.
• Exposure to workplaces that are often dangerous, run Equally any tightening up of regulation must be managed
in an autocratic fashion, and do not abide by necessary in a way which prioritises concern for the vulnerable.
health and safety protocols. There have been calls to implement localised lockdowns,
Strategic thinking guiding the opening of the economy as infections surge and peak, as has been done in several
must take cognisance of this. In the immediate term, other countries. If this has to happen, economic measures
policy measures should be devised and implemented to to mitigate hardship recommended in this brief, could
radically attenuate these social comorbidities. There is no help ensure that measures to contain the pandemic do not
viability in rapidly opening the economy if our hospitals, have the devastating impact seen with previous lockdown
schools, and transport infrastructural systems are unable regulations.
to provide for the well-being of the workforce. Of course, A safer and more equitable management of the economic
wholly dilapidated infrastructure will take time to mend, responses to Covid 19 can be achieved, if policies are
yet significant improvements can be made in the short implemented that: democratise the return to work and
term. The experience of the education sector- where maximise and target support toward health and social
government was initially forced to extend the date on vulnerability. This will require more transformative and
school opening, due to the clear unpreparedness of the capable state leadership, as well as greater civic activism.

3. DEMOCRATISE THE RETURN TO WORK


The President is fond of the idea of ‘social compacting’. Yet ‘social compacting’
must deliver results for the powerless and ensure that there is an equitable
sharing of the costs and burdens of fighting the disease. Cooperation between
business, labour, the state, and civil society must take cognisance of this.
The immediate burdens of economic re-opening, without was allowed to continue (albeit with reduced capacity)
mitigation measures, will be disproportionally felt by throughout the hard lockdown. Workers soon experienced
workers. The experience of the mining industry illustrates the burdens of this decision. AngloGold Ashanti’s Mponeng
this. Declared an essential service, due to its importance mine, for example, was forced to close after some 200
for exports and foreign currency earnings, the sector COVID-19 cases were detected. Impala Platinum’s Marula

5. See recently released Oxfam report: The Right to Dignified Healthcare work is a right to dignified health care for all: https://www.
oxfam.org.za/research-report/
6. President Ramaphosa has concluded his last three public statements by suggesting that it is up to the general public to now take
on the burden of fighting the COVID-19 disease. While the element of personal responsibility is important, it is not sufficient.
7. We acknowledge those within business who have committed to adopting a socially conscious calculus in the future but maintain
that there are significant opportunities to realise this rhetorical commitment in the immediate term.

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COVID-19 RESPONSE POLICY BRIEF #2: Towards a safer, more equitable opening of the economy – 23 July 2020
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operation was also temporarily closed. Mining unions have workplace compliance officers and should be part of an
generally opposed the reopening of the mining sector oversight mechanism to monitor the operations of this
unless proper support structures, including mass testing, are office. Under current regulations, it is unclear how these
in place. However, government has failed to act decisively appointments will be made.
to protect these workers. Mining in the North West is now • Workers’ rights to refuse to work if health and safety
considered to be a new COVID-19 hotspot. standards are not being respected by business must be
We can expect similar outbreaks, particularly in labour- strengthened and enforced.
intensive manufacturing, in retail, hospitals, and • Regular public inspections of business premises should
workplaces with significant public interface, like casinos. occur. In order for this to happen:
Even without COVID-19, workplace health and safety - A mass increase in the labour inspectorate is needed;9
is inadequate. Before the announcement of lockdown and
Level 3, for example, a study by the Department of - Inspections should also be undertaken by industry
Employment and Labour’s Inspection and Enforcement associations, collective bargaining inspectors, local
unit found that two of every five inspected organisations NGOs and municipalities, and unions.
were not complying with the Occupational Health and
Safety Act (OHSA). • It should be noted that smaller businesses might struggle
to meet appropriate health and safety standards and
The COVID-19 pandemic has heightened the need for should be given extra government funding to do so.
a democratic reorganisation of workplaces to allow for This must be governed strictly on need and funds should
greater worker say over investment, production, and be specifically allocated towards accessing basic PPE
innovation (Rodrik and Stantcheva, 2020)8. Although equipment, assisting business to arrange transport for
workers are the principle stakeholder of firms, they are workers, and to care for the vulnerable members of the
generally excluded from core business decision making. workforce.
Corporate and workplace democratisation has been shown
• Failure to implement health and safety measures by
to improve corporate governance efficiency and does not
business owners should be punishable as a criminal
undermine competitiveness (Staples and Linden, 2020).
offense.
Workers having a greater say in managing COVID-19 in
the workplace can help mitigate outbreaks and ease social
Democratise costs and burdens
tensions. This must involve the sharing of both decision-
making and financial costs of returning to work. • Any arrangements regarding shift sharing, working
hours, protection of vulnerable workers with
In the immediate term employers in South Africa should be comorbidities, and other necessities imposed on the
required to enter into agreements with unions and worker workplace in relation to health and safety requirements
representatives on how the workplace will be transformed should come with no income loss to workers, particularly
to deal with the new COVID-19 induced realities and the low paid.
health risks. The state should play a key role in facilitating
- This will require an increase in government support to
this process. The current regulations governing lockdown
businesses and workers and/or a change to the wage
Level 3 do not adequately specify and compel employers
structure.
to involve workers in such decisions. This does not portend
well for mitigating health risk. • Changes to the wage structure within firms can assist
workers with lower incomes and avoid retrenchments.
- The precedent of management taking wage cuts/
freezes, should be institutionalised across the board.
Democratising return to work proposals - There should be an institution of a maximum wage
ratio, for example, between the top 5% and bottom
Democratise workplaces
10% of the workforce.
• Health and safety agreements must be signed off with
• In order to avoid retrenchments, a short-time work
union/worker representative approval, and compliance
mechanism can be adopted during the crisis period. This
certificates should be required by government.
would involve financially distressed employers reducing
- Where a majority union does not exist, this should work times of certain employees. The government
be performed by democratically elected worker could compensate for lost wages due to short-time
representatives. work. This is a model that has been successfully
- Industry bodies are tasked with drawing up health and implemented in Germany (the Kurzarbeit) and has
safety protocols in consultation with the Department proven to be effective in preserving jobs and aiding
of Health. This consultation should include worker economic recovery during the COVID-19 outbreak
representatives. (Seervai, 2020). It is concerning to note that the net
• Workers should have a voice in the appointment of employment loss experienced in South Africa as a result

8. See also the Democratize Work campaign launched by progressive economists and academics: https://democratizingwork.org/
9. This was a proposal made by the United Nations Committee on Social Economic and Cultural Rights (UNCESCR) in their Concluding
Observation on South Africa. The committee raised concern regarding the insufficient level of funding for the Directorate of
Inspection and Enforcement Services and the “chronic shortage” of inspectors. The report recommends an increase in funding, the
securing of a sufficient number of qualified labour inspectors with adequate compensation to ensure retention as well as stricter
implementation of compliance orders. See http://www.un.org.za/committee-on-economic-social-and-cultural-rights-concluding-
observations-on-the-initial-report-of-south-africa/

INSTITUTE FOR ECONOMIC JUSTICE


COVID-19 RESPONSE POLICY BRIEF #2: Towards a safer, more equitable opening of the economy – 23 July 2020
P R O T E C T L I V E S . S E C U R E L I V E L I H O O D S . R E S C U E A N D T R A N S F O R M T H E E C O N O M Y. 5
of the COVID-19 shock is made up of a large proportion retrenchments the institutions should receive more not
of permanent not temporary employment loss (see Jain, less funding.
et al 2020). • Workers requiring COVID-19 testing, and who are in
• Further a strategy to move towards a shorter working need of private health facilities to receive this, should
week needs to be developed. South African workers work have these costs covered by their employers.
amongst the longest hours in the world, against official • Workers in the informal sector, where the impact of
policy of moving towards a 40 hour week. Internationally, COVID 19 outbreak has been particularly damaging,
there is growing discussion about the value of work- need to be targeted for special support.11 This
sharing, and support for the idea of a four day week.10 support should include:
• Frontline workers dealing with the public, and workers - Extension of unemployment insurance to informal
made particularly vulnerable to infection by the nature workers. The UIF should work with informal worker
of their work, like health care workers, should be paid a organisations to register informal workers and
wage premium. This could be financed by wage cuts at ensure they are not lost to the unemployment
the top of the wage structure. insurance scheme. Relaxation of restrictions to access
• Support for furloughed workers, either directly by the Department of Small Business Development
the company or through state assistance, should be (DBSD) small business support and more effective
guaranteed. The government can incentivise businesses targeting to informal sector activities
to bring back furloughed workers by awarding employers - The extension and expansion of various grants that
bonuses for doing so. This policy has been launched by aid the unemployed and income strained.
the United Kingdom government in July 2020. - The removal of all exclusions to immigrants and
• The proposed cuts to the CCMA should be reversed. foreign nationals from access to work and DBSD
To manage impending workplace disputes and support (Rogan and Skinner, 2020).

4. MAXIMISE AND TARGET SUPPORT TOWARD


HEALTH AND SOCIAL VULNERABILITY
Our definition of vulnerability must be expanded to include the social comorbidities
previously discussed. People, particularly women, who have become victims
of the social crisis engendered by the COVID-19 outbreak, require enhanced
support. This requires us to improve and scale up current programmes.

Health-related vulnerability - It is preferable that these workers are put on fully


paid leave.
The elderly and those suffering from underlying health • Elderly and other vulnerable people within
issues, like high blood pressure and diabetes, need more communities should be identified and adequate
significant protection and support within and outside income, food and healthcare services should be
of the workplace. Those workers whose workplaces targeted to this population.12
put them in a high-risk environment (e.g. workers in • Those who fall sick should not lose income.
sectors with significant public interface or in the health
- Quarantined workers should receive cash
sector) also need to be compensated for health and
allowances and extended paid leave.
psychological burdens. Those who fall ill from the disease
require more adequate protection. • Deployment of more community healthcare
workers.
Health proposals • Existing treatment for individuals with other chronic
• Businesses and other places of work need to identify diseases such as HIV and TB and mental health issues
workers with health risks and prioritise their safety. must not be undermined.

10. See http://autonomy.work/portfolio/the-shorter-working-week-a-report-from-autonomy-in-collaboration-with-members-of-the-4-


day-week-campaign/
11. The recommendations here are in line with South Africa’s international rights obligations. Precarious employment in the formal
and informal economies was raised by the UNCESCR in the Concluding Observations. The introduction of a legislative framework
to regulate the informal economy in order to protect workers was recommended, as was an extension of the coverage of social
security and unemployment insurance.
12. There is international precedent for systematic targeting of the most vulnerable population. The Indian state of Kerala, which
in May had the lowest rates of mortality in the country, implemented a policy of grassroots coordinated ‘reverse’ quarantine,
which involved isolation of elderly and immune-compromised people and regular monitoring of their conditions. Monetary relief
equivalent to $112 per person was provided to 5.5 million people that make up the most vulnerable (Khlaid, 2020). Crucial to this
effort was community buy-in and participation which flowed from authoritative, transparent, and consultative state leadership.

INSTITUTE FOR ECONOMIC JUSTICE


COVID-19 RESPONSE POLICY BRIEF #2: Towards a safer, more equitable opening of the economy – 23 July 2020
P R O T E C T L I V E S . S E C U R E L I V E L I H O O D S . R E S C U E A N D T R A N S F O R M T H E E C O N O M Y. 6
Social vulnerability needs of the hungry. 21% of households surveyed in
the NIDS-CRAM study ran out of money in the previous
The Presidency has begun to frame the fight against year prior to the lockdown.
COVID-19 as primarily an issue of personal responsibility. • Construct and expand temporary quarantine facilities
This is despite the limited autonomy available to the vast using hotels and other accommodation and ensure
majority of the population who do not have the means to those infected do not need to remain in dense living
avoid risk. COVID-19 is a social problem, not an individual environments.
one. Part of the immediate fight again COVID-19 • Build partnerships and empower local communities to
must involve significant effort to ameliorate the social participate in design and implementation of support
comorbidities identified. programmes. This was successfully achieved by the
Kerala government in India which set up community
Income support proposals
kitchens, empowered community healthcare workers
• The special COVID-19 grant of R350 promised to all and embarked on mass grassroots education campaigns.
unemployed and persons without income should be This created public buy-in and trust and community
increased, exclusion criteria dropped, and the application empowerment.13
process streamlined and made more accessible.
- A once off universal grant, of a significantly higher Public health proposals
amount (the IEJ called for the implementation of a • The government has embraced a sectoral approach to
R4500 grant in April) should also be considered as an the design of health and safety protocols in workplaces,
immediate alternative to the special COVID-19 grant, which has been international best practice (Makgetla et
given complexities of targeting and accessibility (see al, 2020). The health and safety best practice in public
Isaacs, 2020). spaces in terms of hand sanitation, mask-wearing, and
- The COVID-19 grant should not be suspended after social distancing are fairly well understood. However,
October as is currently envisioned, but should be these protocols need to be constantly reviewed in light
replaced by a Universal Income Guarantee. of workplace and public experience. The design and
• The Child Support Grant should be increased and monitoring of health and safety protocols in workplaces
allocated per child, not caregiver as is currently the case. should abide by the democratic principles outlined above.
• The TERS scheme should be expanded and extended • Significant funding is needed to eradicate shortfalls in
beyond the planned July suspension. personal protective equipment (PPE), staff, and beds in
- Technical issues at the UIF need to be resolved to our public hospitals. In the latest supplementary Budget,
ensure the fund realises its mandate. only R2.9 billion of the health allocation is net additional
funding (Budget Justice Coalition, 2020).
Human settlement proposals • Testing capacity needs to be ramped up and the backlog
• Expand water and sanitation infrastructure support. in public sector laboratories needs to be eradicated.
- Restricted water meters must be opened for public - South Africa needs to manufacture our own test
access. kits. A recent IMF working paper argues mass testing
- There should be mass provision of ablution facilities in and isolation is the most viable pathway to fighting
townships. the disease. They state that the manufacturing of
tests will need to be directed by governments who
- There should be free public provision of hand sanitiser,
should coordinate production across value-chains and
gloves and masks.
integrate this into the state’s industrial policy (Cherif
• Expand and extend a mass food programme into and Hasanov, 2020). The recently announced initiative
impoverished communities. by the Department of Science and Innovation to fund
- The NIDS-CRAM initiative finds that 47% of local testing and manufacturing is a welcome step in
respondents reported being unable to buy food in this direction.
April due to income loss. - South Africa needs to test for antibodies. These tests
- This food programme should be extended beyond the will allow the identification of people who can return
COVID-19 period to fight the scourge of hunger in to work safely and assist in intelligence gathering on
our communities. It should be driven by communities the evolution of the epidemic in the population.
and sponsored by the state. It should support small
• The divide between private and public health needs to
and local farmers, and empower communities
be bridged and an agreement should be struck with the
to build sustainable food supplies and achieve
private sector to ensure public access to resources and
food sovereignty. It should be noted that health
testing capacity at a reasonable cost.
vulnerability to COVID-19 and other diseases is partly a
- The Supplementary Budget does not provide details
consequence of failing to access quality and nutritious
as to how the state will utilise private sector resources.
food.
A tariff of R16 000 has been agreed with private
- It should be noted that the Solidarity Fund distribution
providers for critical care beds per day. State spending
of food parcels ended in May and the SASSA food
could, therefore, rapidly increase as provinces’ public
parcel programme has not been able to meet the
health systems become overwhelmed. As of 28 June

13. For broader discussion see work by members of C-19 People’s Coalition Health Working Group here: https://www.dailymaverick.
co.za/article/2020-07-14-what-a-people-centred-response-to-covid-19-would-look-like/

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2020, the City Press has reported that the Eastern • Rather than allowing this, government should subsidise
Cape public health service has already been over-run. the taxis to replace loss of income resulting from a 70%
However, provinces have not been told if the national capacity requirement.
government will pay for patients to access private • Businesses should plan for private transport for
facilities and provinces are currently being expected to their workforce where possible to assist with travel
use existing funds. congestion.
- Private health facilities might need to be converted - This might require earmarked government support to
into public health facilities as has taken place in other that end.
countries. Spain effectively nationalised healthcare
• The current R1bn subsidy to the taxi industry may need
overnight in order to fight the COVID-19 outbreak
to be expanded. This must come with conditionalities
(Payne, 2020).
to ensure transformation of the industry including:
- The COVID 19 experience should advance the
- Formalisation of businesses.
implementation of the National Health Insurance
scheme and the principle of universal basic coverage in - Payment by taxi owners into Unemployment
South Africa.14 Insurance fund (UIF) and compliance with
Compensation for Occupational Injuries and Diseases
Education proposals15 Act (COIDA).
• Many schools still need to be supplied with PPE, - Taxi drivers and other workers guaranteed the
water, and adequate sanitation facilities despite the national minimum wage and labour rights, including
Department of Basic Education’s plans to send more paid leave.
grades back to school. • The government could mandate staggered office hours
• The school feeding scheme needs to be re-implemented for retail and productive activities to reduce traffic
after its suspension. congestion. For example, productive sectors could start
work at 8 and end at 3, while retail could start at 10
• Schools should be inspected regularly by state officials and end at 5.
and community members and public associations.
• Teachers and learners should be given the right to refuse
to attend schools if they feel their safety is at risk.
Targeted support for women
• Safe and reliable scholar transport should be provided
for all learners. Women are particularly vulnerable to the impact of a
• Free provision of menstruation products for girls COVID-19 induced social and economic crisis. Because of
returning to school. social norms that view care work as the responsibility of
• It is concerning that the recently tabled Supplementary women, women take on extra burdens at home. Their
Budget has proposed no additional funding to basic care work essentially subsidises the lack of quality social
education and has made cuts to programmes related infrastructure in schooling and healthcare (see Phalatse,
to school infrastructure. In addition, no extra funds 2020; Lester, 2020). A surge in gender-based violence
have been allocated to the National School Nutrition has also accompanied the move to lockdown Level 3.
Programme; instead funds have been reallocated from Moreover, recent findings indicate that women have faced
within the programme to service hygiene needs. the greatest net employment losses between February and
April 2020, seeing a 49% reduction in active employment
Public transport proposals over this period (Jain et al, 2020).
• Increase funding for railway infrastructure and security
services is needed to prevent theft and vandalism to
Women-centric proposals
ensure trains can resume effective operations. • Targeted programmess and facilities which directly
confront gender-based violence should be prioritised
• Strict enforcement of distancing and sanitation rules
and streamlined. Safe platforms should be set up for
for public transport facilities. This appears to be
women to communicate distress and access protection
undermined by the 29 June 2020 announcement by
from police and other social institutions. Government
SANTACO (South African National Taxi Council) of its
should extend support to civil society organisations
intention to allow taxis to operate at 100% capacity
already providing these services.
in defiance of the law and due to a perceived lack
of government support; followed by the President’s • Alleviate the burden on women through expanding
announcement on 12 July 2020 that short distance trips safe community childcare and early childhood
at 100% capacity would be allowed. development centres.

14. South Africa’s inability to meet its Human Rights obligations with respected to healthcare provisioning as a result of budget
cuts was a problem even before the pandemic. See the IEJ and SECTION27’s factsheet on “Funding the Right to Health”. In their
Concluding Observations the UNCESCR also noted the large disparity between the public and private healthcare systems and
called on government to address this by increasing the number of healthcare professionals in the public sector, improving access
to medical equipment, and focusing on primary and community healthcare workers. See here: http://section27.org.za/wp-content/
uploads/2019/05/2019-IEJ-S27-Health-Fact-Sheet.pdf
15. See C19 People’s Coalition statement No! To Just Opening Schools. Yes! To Opening Schools Justly for further guidelines on the
just opening of schools : https://c19peoplescoalition.org.za/media-statement-no-to-just-opening-schools-yes-to-opening-schools-
justly

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• Increase the child support grant and extend other design of supportive policies and interventions.
avenues for income support as previously discussed. • It is concerning that, despite rhetorical commitments by
• Increase pay for frontline care workers. the Presidency, the recent supplementary budget does
• At the regional, national, and community level not mention allocations to address the specific burdens
strengthen the position of women in leadership and faced by women in our society.

5. TRANSFORMATIVE STATE LEADERSHIP


Navigating the reopening of the economy and the management of the health and
social impacts of the disease requires decisive state action that is proportional to
the size of the crisis created by the COVID-19 outbreak. That leadership should be
rational, consultative, transparent, and prioritise the needs of the poor.
The government’s initial action in the face of the outbreak grant to all people in need. As of 9 July 2020, 4 million
of COVID-19 was praiseworthy. The state acted swiftly out of 7 million applicants have been paid.
and ambitiously and received acknowledgement locally • The country’s major banks have failed to extend the
and from the international community. However, serious full scale of government’s loan guarantee scheme to
governance problems are indicated by police militarism businesses in distress. As of 7 July 2020, only R10.6 billion
and brutality; opaque governance structures and decision- out of an allocated R200 billion has been extended to
making processes; inconsistent and seemingly irrational distressed businesses.
legislative decisions; and the inadequate and poorly
administered economic relief measures, all of which have The short-term measures outlined in this brief must be
undermined government’s leadership role and led to an accompanied by a massive expansion of the government’s
erosion of public trust. current fiscal commitments. IEJ proposals from April
2020 offer a good starting point and further work is
To turn this around, government must, in the short
forthcoming. 17
term, commit to scale up its economic and social support
commitments and improve on its communication with There have been concerns about rampant corruption
the public. hindering the state’s various support mechanisms
during the COVID 19 outbreak. Investigations into these
allegations must occur swiftly and those found guilty
should be prosecuted.
Scaling up state support and
conditionalities in the public interest
The government’s original emergency rescue package State communication and
was already woefully insufficient to meet the needs of follow-through
the economic crisis induced by the COVID-19 outbreak
(see Wilcox, 2020 and Isaacs, 2020). Now, the June 2020 Measured state communication would go some way in
emergency Supplementary Budget proposes to reduce creating the sense of common purpose and behavioural
the amount of new spending to R36 billion or less than change needed to fight the disease. This is particularly
1% of GDP (see Budget Justice Coalition, 2020). This falls important as we relax restrictions.
well below the expected contraction in the economy,
which the National Treasury currently estimates at 7.2% The President should host more regular consultations
and the IMF at 8%. Other estimates go as high as 20%. with the public and engage in live conversations with the
As of 29 June 2020, only one quarter of the government’s media. A weekly consistent public interface with the public
package has been spent. would go some way to rebuilding public trust and buy-in.
Effective public communication was a cornerstone of South
Compounding matters, as IEJ research indicates16, the Korea’s response to the COVID-19 crisis and one reason
rescue measures have not reached their intended for the country’s relative success in mitigating the disease
recipients. (Makgetla et al, 2020). This effort is undermined when
• The wage support funds (via the TERS UIF scheme) is government fails to communicate in a clear, consistent,
backlogged. As of 29 June 2020 the value of unpaid and persuasive way, and does not follow through on
claims to the scheme stood at R4.2 billion. Some 1 million providing necessary complementary support systems,
workers who are entitled have not been paid as they especially financial. The state’s approach to achieving this
were not picked up by the UIF system. must consider that individual actions are constrained by
• SASSA has failed to administer the special COVID-19 social circumstances.

16. See IEJ Rescue Package Scorecard here: https://iej.org.za/south-africas-covid-19-rescue-package-scorecard/


17. See IEJ proposals on what should constitute an emergency rescue package here: https://iej.org.za/wp-content/uploads/2020/04/IEJ-
COVID-19-emergency-rescue-package-summary.pdf

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6. CONCLUSION: MOVING TOWARDS
A TRANSFORMATIVE AGENDA
AND ‘JUST RECOVERY’
In this brief we have articulated an alternative approach to the government’s current
risk-adjusted strategy and commitment to rapidly open up the economy. We have
advanced an approach that integrates health and economic objectives and accounts
for social comorbidities that are rooted in South Africa’s uniquely vast levels of
inequality. Our approach demands a more cautious and managed opening up of the
economy and a massive expansion of state and business support mechanisms.
Beyond this, measures implemented now must support Hasanov, 2020). Immediate efforts can translate into
the aim of building a ‘new economy’, as the President long-term gains.
has called for. There is a common acceptance that the The National Treasury’s radical reduction of state
post-COVID-19 economy we are moving towards cannot
expenditure in the midst of a profound economic
resemble the one that the disease infiltrated. A ‘new
collapse however, runs in the opposite direction to the
economy’ must be democratic, equitable, and just18.
current need. The recently tabled Supplementary Budget
In order to realise this vision, we will need to see the
proposes wide cut backs in the near term and intends to
implementation of radical social reforms and conscious
slash state spending to achieve a primary budget surplus
efforts at redistribution, a point accepted even by
by 2023/24. It reneges on the President’s original rescue
previous advocates of economic orthodoxy (see Financial
package. 19The move to zero-based budgeting (see
Times, 2020; Schwab, 2020). A recent international
Coleman, 2020) indicates government’s commitment to
survey conducted by NYU Center on International
finding more areas for cutting and constitutes another
Cooperation indicates that such policy measures enjoy
the support of the public (Zamore and Phillips, 2020). nod towards austerity. Such an approach will result
in economic ruin for the country (Sibeko, 2020, see
In South Africa, the short and medium term are also Botta, 2015; Breuer, 2019 and Alesina et al, 2018
intertwined. Additional fiscal support measures now, for theoretical and empirical critiques on the logic of
for example, must be complemented by a significant austerity).
stimulus package going forward. Similarly, measures to
empower workers or expand social security in the short It is for this reason that IEJ joined calls to Parliament
term, lay the basis for an economy premised on equality to reject the Treasury’s Supplementary Budget; calls
and the interests of the majority. The production of test for the President’s R500 billion rescue package to be
kits, coordinated by the state, can also be leveraged to fully implemented; and for further relief measures to
improve manufacturing capacity, enhance technological be introduced to address the shortfalls identified in
know-how and create jobs for the future (Cherif and this brief.

If progressive forces can find agreement and a common platform now, the reopening of economic
activity could be leveraged to realise a transformative vision of a new economy based on equality and
the right to health, well-being, and economic democratisation. This would require a collective effort
to shift the strategic thinking guiding government’s immediate efforts to rapidly open the economy
in an unmanaged way, and challenge the programme of austerity promoted by the Treasury.

18. See recent report ‘No going back to normal: Imagining a Just Recovery in South Africa’: https://350africa.org/just-recovery-report/
19. See IEJ analysis of the supplementary budget here: https://iej.org.za/wp-content/uploads/2020/07/IEJ-COVID-19-supplementary-
budget-analysis-1.pdf

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